DONG businesses sold for 8,7 billion DKK

DONG Energy writes in a stock exchange announcement that it has sold its oil and gas business to the chemical company INEOS, which is based in Switzerland and England, for a total of 8,7 billion DKK. 440 employees will be taken over by INEOS, the company writes.

"The transaction completes the transformation of DONG Energy to be a leading player in renewable energy," says CEO Henrik Poulsen in a press release this morning."Since the decision to sell our oil and gas business in 2016, we have been working actively to secure the best transaction by selling the business as a whole, getting a fair price for it and ensuring optimal conditions for the long-term development of the oil and gas business. Through the agreement with INEOS, that is precisely what we have achieved," says Henrik Poulsen.

Of the purchase price of 8,7 billionDKK, INEOS pays 7 billion DKK in cash. 1 billion DKK is paid for the Fredericia plant and up to 0,7 billion DKK,subject to the development of the Rosebank field.

INEOS, one of the world's largest chemical companies, says in a press release that they are pleased with the acquisition of DONG Energy's oil and gas division.

"DONG Energy's oil and gas business is a natural part of INEOS. We are pleased to acquire this competitive, well-run business with a highly successful and experienced team, a strong portfolio of long-term assets and a very good mix of existing production and development in the North Sea,” says President Jim Ratcliffe in a press release.

A total of 440 employees will be moved to INEOSin connection with the transfer of the oil and gas business.

DONG Energy expects the sale to give the company an accounting gain of 2,5 billion DKK incl. payment for the Fredericia plant. As the oil and gas activities are already booked separately, it will not affect the company's expectations for the year.

"The price makes sense and, with the trade the transformation from black to green is finalized. There is room for some extra good stock market voting in the Dong stock today," Nordnet's investment economist Per Hansen wrote on Nordnet.dk.

And the share price also increased by 0,64% to 281.80 this morning. The course has risen 5,3% this year.

With the sale to INEOS, speculation about Maersk Oil's possible acquisition of DONG's oil and gas activities can stop.

The same is probably also the Danish state's ownership interest in the fields.Berlingske has previously written that the state will withdraw from its ownership through a sale. DONG's CFO, Marianne Wiinholt, confirmed to the newspaper that continued state-owned ownership of the fields "has not been a problem" in connection with the sale of the company's oil and gas activities.

The sale of the activities must first be approved by Authorities and is expected to be finalized in the third quarter of this year, says DONG Energy.